Archive for Risk management

In Robert Frost’s poem, The Road Not Taken, a choice is laid out in the form of two diverging roads. While many interpret this poem as an encouragement to take a less traveled road, the poem doesn’t say this. Frost presents us with two paths that really look about the same. While he would like to have tried both ways, he had to decide and then “way leads on to way”. He won’t return to try the other path. A choice is made and then Frost tells us how he will describe this decision in the future. He admits that he will likely point to this decision as one that made a difference. “Telling this with a sigh”, how can we make good decisions and then how do we live with decisions we have made?

Gather the facts: It is best to start out in an analytical mode. Understand the financial implications of a decision. Learn about the players already involved. Get information on the product if this is a career decision. Put information about an offer in writing and solicit input from experts on what is fair and appropriate. If you are deciding about a more personal matter the same concepts apply. What is the personal cost of proceeding? What will change in your life and does it matter? Size up the pluses and minuses. Write them down if that helps you get organized.

Consider the “way leading on to way”: Many choices we make will lead us down a path. Usually we can tell if the path is a good one. A degree in education will likely lead to a teaching job at lower pay but at great personal reward if this is your calling. A degree in engineering will open up many doors but will likely lead you to a desk job with less freedom to take blocks of time off or to work at home. Deciding to join a more established company could lead you to a number of job possibilities within the company but you will be a small fish in a large pond. Picking a smaller company will give you more chance to lead but you will not learn as much from others as you will likely be the only expert in your area. As you consider how the way will lead to another step, think about whether that path is where you want to be.

Heart check: While an analytical approach is a good backdrop for any decision and should shape how you feel, the tie-breaker is almost always the heart. More often than not there are two paths that both look pretty good. Perhaps like Frost one of the paths looks a bit more worn than the other but it is hard to see very far down the path and really there are few paths that haven’t been trod. What alternative feels right to you? Where is your passion. What do you wake up thinking about? Even if the direction you are leaning is the least understood, it might be the best for you if your heart is there.

Be brave: When you have weighed facts and honestly reviewed your heart’s desire, it is important to be brave with the decision. Have confidence in your abilities to do a job or make a move or change a career or launch a project. There is little that can’t be figured out with the right attitude and some passion. If we are not brave in our decisions they get made for us. Sometimes the options go away. Sometimes time and resources force our hand. So, when there is a decision to be made, make it and move.

Move forward knowing that you will spin the tale: This truth is a bit of a relief. We pick a path and it makes us who we are. When we look back we usually tell the story that our wise decisions got us to where we are. And honestly, we are right in part. If we make our decisions with the facts coupled with the heart and we bravely move forward we are likely to lead a life of adventure and learning. We are likely to be satisfied with what we have become. We are likely to be happy with our choices.

We all have choices to make. Be thoughtful, heart-full and brave and then pick your road. And God bless you on your journey!

The Road Not Taken by Robert Frost

Two roads diverged in a yellow wood, And sorry I could not travel both And be one traveler, long I stood And looked down one as far as I could To where it bent in the undergrowth;

Then took the other, as just as fair, And having perhaps the better claim, Because it was grassy and wanted wear; Though as for that the passing there Had worn them really about the same,

And both that morning equally lay In leaves no step had trodden black. Oh, I kept the first for another day! Yet knowing how way leads on to way, I doubted if I should ever come back.

I shall be telling this with a sigh Somewhere ages and ages hence:Two roads diverged in a wood, and I— I took the one less traveled by, And that has made all the difference.

Monday, May 20th started out as a normal day for people in Moore, Oklahoma, a community of about 56,000 people about 10 miles south of Oklahoma City. By late afternoon the world had turned into rubble and ruin for many in this town. Rescuers worked through the night to pull people out from under destroyed homes, businesses and schools. 29 people died including 9 children. Clean up will take months. Recovery will take years.

Immediately after the tornado passed, the local police, firefighters and EMTs took action. Within hours, the Oklahoma National Guard arrived at the scene with fully rehearsed rescue teams. They had the tools, skills and communication processes in place to call in more help. The additional help was triggered based on what they saw when they got there. By nightfall the Red Cross had shelters set up. The nearby medical facilities were ready for an emergency and all hands showed up to help the wounded. Now, neighbors are showing up to cook, find pets, deliver gloves and generally serve. The town is mobilized.

What kind of leadership is required to get a community through a crisis like this? What can we, as students of leadership, observe and thus learn and apply in our areas of influence?

Act quickly – There is no time to hesitate when a crisis occurs. Decisive action is important in triage. Even in a business context this remains true. Get moving on the critical issues of life, safety, continuity, sustenance. Know where your staff is. Get the facts. Gather your resources. Assess the damages. Send out the first responders. If the problem is with a supplier, fly there. If the issue is in your own manufacturing plant, visit and evaluate. If the problem is with a new product launch, get to where the action is and gather the information at the source.

Ask for help – There is no virtue in going it alone. If the problem is really a crisis, call in others. Get suppliers, partners and other functional groups involved in solving the problems. Tell the boss.

Communicate regularly – Perhaps the information will not be precise. Perhaps you will have to revise after more is known. But getting information out to those impacted will serve two purposes. First, you will calm those impacted. You and your team know what is happening and action is being taken. Second, you will get everyone on the same page. When should updates be expected? Who is doing what? What are the near term instructions?

Create structure – Put together a war room with a steering team. Put people in charge of different parts of the problem. Ask for a cadence of information flow. Meet regularly.

Be visible – If you are running a local team, be there. If you are running a global team, be there virtually by calling into team meetings or even creating video updates. Be accessible. Talk with the team casually to understand mood and to get facts from all levels. Your ears are the most important tools you have during a crisis. Listen.

Be a servant leader – Pick up the symbolic shovel. Contribute at multiple levels even if just a little. Your job is to show others that you are in the situation with them. If you are seen as above it all, the team will not hit its full potential.

Have a plan prepared beforehand – Of course, this is wise. But many companies, families, small businesses are not thinking about the possibilities of a game changing emergency. Thinking through an action plan before the crisis can save crucial minutes when something happens. Put the plan in writing. Practice with a staged crisis situation. Involve your immediate organization and those throughout your value chain. Business Continuity Plans can make all the difference when a crisis occurs in your company or supply chain.

News of the tornado in Oklahoma struck a nerve for me. There is no way to predict when a crisis will occur in communities and similarly, there is no way to predict crisis in business or supply chains. The only certainty is that crisis of some sort will show up in the future. Be ready and be a leader when it happens.

In preparing for battle I have always found that plans are useless, but planning is indispensable.

Dwight D. Eisenhower

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Acmestartup has a breakthrough security product. The software bits have lovingly been stuffed in a white box server platform and volumes have been manufactured at a reputable contract manufacturer who just so happens to have designed the basic server. These initial beta boxes will be sent to early adopters of this new breakthrough product. First impressions are everything. It matters what they think. These first users will be the evangelists and the potential investors of this nascent company. Alas, when the product arrives it doesn’t work. What could possibly go wrong? How hard is it to customize an off-the-shelf server and load software and firmware. Apparently it is hard enough that the CEO of Acmestartup has made the resolution of this manufacturing problem his number one priority. When he should be worrying about the next great security algorithm, he is losing sleep over why the box shows up dead on arrival.

Startups and small companies are all about the product and customer and should be. In the same way that these small companies should get professional public relations, accounting and legal advice, these companies should be getting professional manufacturing advice. Some engineers have both development and manufacturing experience but not many of them have ramped products to volume nor have they had to choose partners, negotiate contracts or set up manufacturing processes. And even if these engineers have had manufacturing experience is it good to divert attention away from the critical path of product development and maturity? When in doubt, hire a professional. Here are a few key pointers for those not in the field.

1. Pick the right manufacturing partner – The right partner has a focus on small companies and they have a good reputation. Ask for references. Talk with your start-up peers with similar products. Make sure that they have some local presence. Don’t rely on a company that is only in asia. You need help close to your development team. Ideally your partner should have some local manufacturing, not just reps close by.

2. Put together a cracker-jack virtual ops team – You probably can’t afford to hire all of the elements of a dynamite operations team but you can piece together experts through consultants and through your contract manufacturing partner. Make sure your collective team is thinking about purchasing, planning (and the systems that go along with the purchasing and planning), customer service, assembly and test, quality, metrics. Yes, you are small and volumes are small but all of these elements could stop you dead as you are ramping.

3. Put a manufacturing geek on the team – Do this early. Embed them with the engineers. Think about the component suppliers and final assembly process early. If possible, have your contract manufacturer supply someone to sit on your team. It is not too early to design for manufacturing if your intention is to supply a quality product to the customer as quickly as possible. Don’t design, build, ship crap, recover or try to recover.

4. Kick the hell out of the product before you ship to a customer – HALT is Highly Accelerated Life Testing. This test will vary temperature, vibration, voltage levels until the unit fails. In other words, add variation to the process ahead of shipping. If you plan to ship your product any distance, make sure that you know what the product can withstand in terms of temperature and vibration. In addition to HALT testing, if you have multiple suppliers for a component, vary what you load on the board or use in the product and see if you can make the product fail. Ship the product across the country to your mother. See if it arrives ok and have her set it up. This works less well if the product is for the enterprise or for the construction industry but find the analogy (ship to your buddy in an IT department).

5. The devil is in the details – The small things are what get you. This is true for all companies but is particularly dangerous for smaller companies without the resources to recover. Don’t forget about customs, import taxes and regulations. Don’t ignore documentation, labeling, packaging. Watch out for long lead times for components…all it takes is one part that you can’t get fast enough. And finally, consider how you will repair and/or upgrade your product. What is your “reverse supply chain”?

While all of these considerations could seem obnoxious when you are working on a product that solves man’s or woman’s most pressing problems, they can stop you in your tracks or at the least will slow you down enough for the competition to catch up. So, consider manufacturing as a competitive weapon when launching your business. Seamless ramp coupled with highest quality at no cost to time to market should be the goal. It can be done. You aren’t a dummy!

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Yesterday a riot in a Foxconn plant in Taiyuan, China got out of control and police were called in to stop the violence. The reason for the unrest is unclear. The news articles coming out of China are stating that there was a disagreement in a dormitory between guards and employees. The articles are saying that 1000 workers were involved (out of the 79,000 in this facility)…and yet 5000 police were called in. This conjures up a disquieting image.

Warning: the following numbers are my guesstimates and are just a way of framing the problem. I have read that if Apple were to build the iPhone in the USA the cost would increase by $50 which is about 2 hours of fully loaded labor. Since that is just too much time to assemble, test and package the phone I am going to assume that the $50 includes space, logistics and even a tax differential so it is an “all in” number. The consumer price of the phone is about $650. If the gross margin is 50% (surely Apple doesn’t get all of this but it is spread amongst distributors/carriers) then the total cost of goods sold (COGS) is about $325 for material, logistics, overhead, depreciation, labor, etc. Adding $50 to this is an increase of over 15%to COGS which isn’t small change. What if that increase in cost could be offset with benefits that either manifest now or in the future? Could we find a way to bring some manufacturing back to the USA? What is the tipping point?

1. Grow your own workers – There is value in having access to trained and local electronic assembly and test technicians, engineers, manufacturing leaders. We have lost the training grounds for good manufacturing prowess in the USA. The last of us “hands on manufacturing nerds” are going to leave the workforce eventually and the next generation will not have experience on an actual manufacturing line.

2. “Next bench” experience for development engineers – The engineers who are developing the next big thing can walk down the line, ask questions, observe and learn from the people doing the assembly work.

3. Faster quality resolution – If a problem is found it is easier to be all over it if manufacturing is close at hand. Thus, faster resolution.

4. Faster ramp – Once the manufacturing expertise is solidified near the development and marketing arm it is easier to take ideas and ramp them to market. Less travel is needed. Less translation and more cooperation is possible.

5. Disruption insurance – Spreading out risk is a good idea. If all of a company’s manufacturing is in China and there is a labor strike, natural disaster, logistics event, fuel crisis you have a longer and more expensive recovery. Put your eggs in multiple baskets if you have the volume.

6. Good will and free advertising – Surely it is worth something to a company to get the good will associated with “made in America”. I know people who won’t buy an iPhone because of the “slave labor” association and noise. That is an unreasonable response since all phones and frankly almost all electronics are made in China. But there has to be some consumer value to “made in the USA”. Maybe it would just be a willingness to buy the brand but not a willingness to pay more. But even that has value. Volume helps a company get to lower costs and more margin dollars associated with that volume helps cover more operating expense even if the margin per unit is lower.

7. Wild card government help – Maybe it is coming at the federal level. Surely there is help to be found at the state level. Look for it. Find a deal. Make a splash in the news. Start some momentum.

It is certainly time to take some manufacturing out of China and to spread it across the world. The risks are just too high in China to put all of your manufacturing in that one country. I believe it is time to bring some manufacturing back to the US. If the differential to bring work back is about a 15% hike in COGS with no mitigation let’s chunk the problem. Find a way for government to mitigate 5% with tax breaks or deals on land or capital. Be willing to eat 5% in the company if margins are good and if the future benefits can justify the investment. Pass on 5% to the consumer. Since this is 5% of COGS it is a smaller percent of the price to the consumer. Perhaps the impact shows up as a 2-3% increase. I think it would fly.

A global supply chain is the norm for almost any company in business today. In order to take advantage of the capabilities throughout the world and in order to reach markets around the world it is important to create a system that reaches across borders. Creating that system is a difficult process especially for smaller companies focused on technology and marketing as first priority. How do you build a robust supply chain that is a competitive weapon rather than a necessary evil? Below is a summary of mistakes commonly made.

1. All eggs in one basket: It is risky to partner with only one contract manufacturer, logistics partner or key component supplier. Comparing price, quality, locations and practices can give you the information you need to drive your supply chain toward best in class. Having some tension in the relationship will also give your partners a good reason to offer you the best prices, quality, technology and lead times. But if you don’t have the volume to support more than one supplier without compromising cost or attention, put your eggs in one basket…and watch that basket very closely. Even with one partner you can quote annually to keep the tension in the relationship and to give you additional information. Ask for a transparent cost model so that you know what you are paying for and can more easily disaggregate the work to look for the best combination of suppliers. Even if your volume won’t support multiple production suppliers of key components, qualify more than one supplier ahead of time to give you options if there is a problem later.

2. Out of sight, out of mind: Once a global supply chain is set up and running it is a mistake to assume that the job is done. Weekly conversations should be held with your partners either in person or on the phone or via video-conference. Virtual meetings can be set up to review metrics, current action items and future work. Monthly visits should be made to meet with the key players eye to eye. Walk the production floor. Talk with the people on the production line even if they don’t speak your language. Use a translator and convey your thanks and interest in their work. That will help you later when fast action is needed and you are not there to oversee. Observe and ask questions. Make sure that you are getting what you expect. Remember, people respect what you inspect.

3. Too little, too late: It is unwise to assume that a verbal contract or purchase order with legal sounding words on the back is good enough. Draw up a contract and negotiate the details. While you are unlikely to ever sue your supplier, the value of a solid contract is that you have talked over the problems before they occur. Don’t wait until you have a field quality issue to decide who will take lead and drive to root cause. Don’t wait until there is a sub-tier issue to decide who is liable for the resolution and cost. There are templates available for supplier contracts and it is okay to start there but don’t stop there. Think about what is important in the relationship and write it down. Even if it doesn’t end up in the final draft at least the conversation has been held and documented and there is some understanding of expectations.

4. It’s not my job: Don’t sit back and assume that your supplier will watch your back. Supply chain design and development remains the responsibility of the product company. The inputs to strategy are targeted markets, technology needs and growth plans. Yes, the inputs also include changes to the supplier landscape and cost shifts, but it is unwise to rely on the supplier to tell you when to modify your supply chain. I recommend an annual review of labor and logistics costs, shifts in the market, tax changes and other macro-economic factors. What are the implications to your supply chain? Is it time to manufacture in a region for tax purposes? Are labor rates changing enough to consider a shift to another region of the world? Do you have a change in your product roadmap that will require new process technologies?

5. Only sure thing is death and taxes: Death is hard to control but don’t overlook the impact of taxes. The tax implications of your supply chain decisions can outweigh the labor cost benefits. Have a tax expert examine your plans ahead of time. Understand your target markets and if there are import taxes based on manufacturing content. Are you selling into government agencies? Some have restrictions about where the product is made.

6. Count the costs: Don’t make the mistake of just looking at the price tag from your supplier. Remember the cost to move the product to the market. Remember inventory carrying costs for a longer pipeline. Remember the cost of travel to manage a remote supplier. Quality costs are higher if your pipeline is longer and if the time to resolve is longer. And finally, what is often overlooked is the cost of time. If your new product slips a month due to the challenges of remotely ramping with the wrong partner, the costs are large. Do the math on the full costs of your alternatives.

7. Time Flies: Time should be mentioned a second time because it is just that important and is often not considered when designing a supply chain. It does take longer to get work done across time zones, cultural and company boundaries. However, if managed well there can be an advantage to having multiple time zones to work a product launch or a quality problem. The key is to set up the processes ahead of time with the right responsibilities and accountabilities. It is a little like a battle strategy in that you want to consider where you position your forces and how you arm them based on where the enemy lies. With new product launches the enemy is lack of documentation, lack of information flow and lack of iteration. Launching remotely needs more of all three. Don’t neglect to make that investment to save valuable time.

8. Risky Business: When natural disasters strike, the companies best able to recover are the ones that don’t ignore the inevitability of failure. Having a documented business continuity and enterprise risk management plan in place will give the troops a jumpstart on what to do. Work with suppliers ahead of time on “what if” scenarios. Know who within your organization will run the war room. Decide how you will respond to a disaster in any part of the world. Of course you can’t anticipate every problem but you can do enough to be in better shape than others. When being chased by a grizzly bear you don’t have to be the fastest, just faster than the other guy!

9. Stunted Growth: Don’t just think about what you need now. It is a big mistake to pick partners based on what you need today and not think about their global footprint, scalability, systems strengths and capacity. There is nothing worse than having to pick up and move your processes while growing just because you didn’t partner with growth in mind. If you need one assembly line now, make sure that your partner has room to give you three without moving you to another building or location. Can you claim dedicated resources now ahead of expected growth? Have you picked a supplier who has bought into your plans and will invest with you appropriately?

10. Flee, fly or flow: Last but not least, don’t staff up with a wimpy team. Understand the importance of picking supply chain leaders who have lived through global supply chain challenges and can bring experience to the table. Resiliency is a characteristic that comes to mind. There are a myriad of challenges that come up with a global network of suppliers. The challenges can be viewed as a necessary evil or can be managed and mitigated to bring your company a competitive advantage.

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At the age of 8 Dawn Hanson and I rode our bikes down to VanDriel’s, our local drugstore, bought penny candy, made kool-aid and set up the best refreshment stand in Mount Prospect. Of course we marked that candy up and ended up with quite a profit between the candy and the high margin kool-aid. This worked well until a couple of bullies dropped dry ice in our kool-aid and ran off with our candy. At least they didn’t get our money but all in all the day was a bust. The entrepreneurial experiment was not. We went back at it on future days with our kool-aid covered and our bulk candy safely hidden. I don’t remember if we told on those boys (yes, they were boys) but I also don’t remember them returning. Success? All in all, I think so.

Given my story you can see where I land in answer to the title question. In business it is important to step out and take risks even though that makes you vulnerable and likely you will get pounded at one point or another. However, without that vulnerability you will not grow in understanding of yourself or your business. Let’s take this one step further. How do this impact us in the realm of career management and personal growth?

While I might be one of the first to celebrate the value of predictability, analytical approaches and execution to commitments, there is room and critical value to ambiguity, risk taking and vulnerability. How do you stuff those opposing characteristics into one being? Practice and mindful development is the answer I have found.

The word courage is from the latin root word “cor” which means heart. That is why this whole process gets personal. There is a need in leadership and in business to be self-aware of your heart and what you are feeling. You need to be willing to open that heart up to failure and to criticism. Practicing is all about stepping forward into areas of discomfort in order to exercise that vulnerability. We can’t protect ourselves from scrutiny if we are to be open-hearted, vulnerable leaders.

The base on which to build is one of self-awareness and a sense of worthiness. I am enough. I am capable. I have something to offer to the world. Yes, I have weaknesses and I make mistakes but those do not stop me. Here is what I need to ask myself regularly:

1. What would I do here if I wasn’t afraid?

2. What is the very worst that could happen and can I handle that downside? (I would not say that risk should be taken without weighing the consequences and mitigating within reason.)

3. How am I influencing others through this action? Do I really need to step out and be seen in order to set the right example?

4. Am I holding back based on shame or based on what others might think? What is driving that?

This idea of being vulnerable and allowing oneself to take bold risks is important to the success of people in general but I submit that this is a key challenge and sticking point for women in business. I will come back to this in later posts but for now I would like to say that I, like many of my peers are inhibited by fear. Some fear is helpful so that we avoid picking fights with wild animals and walking alone down dark alleys. But fear to expose all of who we are and let others see our warts and vulnerabilities is fear to eliminate in order to become all that we can be. Easy to say and hard to do. Let us begin!

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In all chaos there is a cosmos, in all disorder a secret order. Carl Jung

On March 11, 2011 the Great East Japan earthquake, magnitude 9.0 kicked up a wall of water 133 feet tall that hit Miyak0 in the Iwate prefecture. This tsunami traveled 6 miles inland leaving destruction and death in its path. The Fukushima Daiichi Nuclear Power Plant experienced a level 7 meltdown. The ports and airports and roads and factories shut down in northern Japan. This was the worst earthquake in Japan’s recorded history and damages are estimated at over $30B. Chemicals, semiconductor and automotive manufacturing happened to be concentrated there thus crippling several industries with one big natural act.

In the fall of the same year the record rains in Thailand coupled with the mismanagement of the water flow out of key industrial regions caused flooding north of Bangkok. Damages were estimated at over $3B. Key global disk drive manufacturers happened to be concentrated there thus impacting the electronics industry for almost a year.

In 2011 and 2012 the labor rates in Southeast China increased an average of 17% per year. With the RMB strengthening against the dollar at a steady rate (7.3 RMB per dollar in 2007 and 6.3 RMB per dollar in 2012) we spend more dollars to buy that RMB worth of labor.

A barrel of oil has increased from $55ish per barrel in 2007 to $95ish now. Logistics costs have therefore increased at a similar rate.

Yes, there has always been change but the rate of change in the world is increasing. It is not simply right to follow the old norms. It is not simply right to outsource to China. It is not simply right to outsource. The defaults that used to rule the day (and plenty of momentum still exists) are no longer good enough. Now it is important to know the inputs and outputs and to understand the trade-offs prior to making a decision. While I’ve not seen a perfect model out there, there are helpers available through most contract manufacturers. It is in their best interest to steer you to the right geographies ahead of you looking into it on your own. If you decide that Vietnam is the place to put your next product and your CM doesn’t have a plant there that is an open door for re-quotes and loss of business. Can you trust the models your partners offer? I say no, not fully.

Here are a few of the questions to ask when deciding how to design (or re-design) your global supply chain:

What is the value of a shorter lead time?

What is the cost of your product and therefore what are the inventory implications of your SC design decisions?

What are the tolerances of your product? Can you pull it off from a distance?

Are you selling to any government agencies with restrictions on origin of manufacturing?

What are the tax implications?

How smooth are your new product ramps? Can you do that from a distance? What is the cost in travel and time?

Are their advertising advantages to building in one area or another? (e.g. made in Japan makes a big difference in the Japanese market)

Can you reduce your packaging costs with a shorter logistics path?

What is the expertise of the local supply base? What is their productivity? Are your current partners manufacturing their already?

Is it important to keep some manufacturing expertise in-house or close by for that “next bench” learning and design improvement?

Some of these questions are answered using models but final decisions should be made using structured decision-making methodologies. I recommend a must/want sort coupled with a weighting process. While it won’t be precise it should yield the right discussion based on analytical input.

As the quote at the top infers, chaos leads us to opportunity. The last few years have been non-stop chaos but this can lead us to reconsider default answers. There is a secret order to the chaos given the right approach.

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“When we try to pick out anything by itself, we find it hitched to everything else in the universe” John Muir

The Alstott family is considering a move to a new provider for phone, internet and TV. We will save some money this way and given my cheap nature this is appealing in spite of the hassle. Wow, is it a hassle. I’ve intertwined the workings of my life with my personal email address. Healthcare, airline programs, internet sites, charity organizations, friends and probably many other places that I’ve forgotten all know me by that address. When I switch I risk being cut off! Now some of this is ok. If you are like me you are getting more junk mail than useful mail and I’m ok losing touch there! How can I get the good without the bad? My plan is to have an overlap and for 1 month I will monitor my email in one system and proactively change all of my information with various services and people. Brilliant, eh? An even better idea would be to switch to an email service that doesn’t depend on my internet provider. At least I am thinking about alternatives to managing my risk proactively. Now I have to execute!

In the supply chain world we are, once again, in a recovery mode due to another natural disaster. The Thailand floods have put huge parts of that country into huge disarray. People have lost homes. Businesses are literally under water. Animals are dead, crops ruined and for a while alligators were swimming around in the streets. Terrible tragedy. Supply chains around the world are now madly trying to recover supply to satisfy customers. This profession is getting good at reacting to natural disaster, but we should take the time to proactively manage our high risk materials. The NPI process isn’t complete without an assessment of risk. Products might launch with sole or single sourced parts but companies should know what those parts are and have an action plan for each. Ideally that is baked right into an NPI launch plan so that prior to first ship the plan is in place. The plan can include die banks, inventory, second locations, dual sets of tools and/or other risk mitigation ideas.

Supply management is all about risk management. As John Muir says, we are tightly hitched to everything in the universe and the hitch is tightening as we evolve into a truly global economy!